Camdessus outlines agenda for IMF at start of the twenty-first century

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Speaking before the Council on Foreign Relations in New York on February 1, IMF Managing Director Michel Camdessus addressed the role of the IMF at the start of a new century. In his remarks, Camdessus emphasized the institution’s ability to adapt to the challenges of a continually evolving global economy—in its response to both the needs of its members and the systemic needs of the global economy. He stressed that the IMF’s responsibilities to its members extended beyond crisis prevention— that is, its surveillance function—to include poverty reduction and crisis management. On the global front, Camdessus said, calls for reform of the international financial architecture implied greater economic policy coordination and cooperation among all nations and with international institutions to maintain global stability and reduce the incidence and severity of financial crises.

Following are edited excerpts of Camdessus’s remarks. The full text is available on the IMF’s website (www.imf.org).

The IMF is a perennially self-reforming institution. Looking to the future, we can anticipate not only a continuation and deepening of the trends toward integration of markets and of massive global private capital flows but also the presence of tough challenges: old ones, like poverty, and new ones, such as the aging of populations in many countries, and the potential for a surge in extremism and violence if we are not able to reverse the trend toward greater inequalities between the poorest countries and the affluent countries.

The IMF that exists today offers its membership five well-demonstrated strengths:

• universality and the responsibility it bears to interact cooperatively with its members on their economic policies;

• a clearly defined, tried-and-tested mandate as set out in its original purposes, which continue to ring remarkably true today;

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• flexibility—that is, its capacity to adapt its activities rapidly to the new demands of a continually evolving global economy;

• the fact that it was conceived as “the machinery” for promoting multilateral cooperation in addressing international economic issues; and

• a staff well known for its professionalism and unique experience in performing its tasks of surveillance, technical assistance, and crisis management.

How can these strengths be most effectively deployed and developed in the midst of today’s rapid innovation and evolution, in a world where we must always expect the unexpected? By striving to be responsible to each member whatever its size or condition and, simultaneously, by keeping a global perspective, discharging the IMF’s responsibility with respect to the whole international monetary and financial system.

IMF’s responsibilities to each member

All countries must always be able to rely on the IMF to be helpful in the pursuit of their objectives of stability and high-quality growth. This points to an active and wide-ranging agenda. Let me concentrate on three areas where our activities are changing.

Crisis prevention. The world needs an institution to help in crisis prevention. But this is the very minimum. The IMF’s proper role in normal times is analysis and policy dialogue—surveillance—for all its members, from the United States to the smallest Pacific island nations. The primary focus, of course, will be on the core areas of the IMF’s mandate—macroeconomic policy...